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SPX/USD — Rotation Intensifies

Key Highlights

• S&P 500 remains below 7,000
• Technology sector under sustained pressure
• Rotation into value and defensives continues
• Earnings from mega-cap tech in focus

Market Overview

US equity markets extended their pullback on Wednesday as selling pressure remained concentrated in the technology sector. The S&P 500 slipped further below the 7,000 psychological level, reinforcing the view that the recent move represents more than a single-session correction.

The divergence between indices remains pronounced. While the Nasdaq continued to underperform amid heavy losses in semiconductors and software names, the Dow Jones Industrial Average advanced, supported by strength in industrial, healthcare, and value-oriented stocks. This split highlights an ongoing capital rotation rather than a broad-based liquidation of risk assets.

Semiconductor weakness intensified following disappointing forward guidance from Advanced Micro Devices, reigniting concerns about the sustainability of AI-driven earnings growth. Losses spread across the chip complex and into enterprise software, reinforcing skepticism around premium technology valuations. At the same time, defensive names posted solid gains, reflecting a shift in investor preference toward earnings stability over growth narratives.

Macro data offered little relief. Weak private-sector hiring reinforced concerns about economic momentum, while persistent services inflation complicated the outlook for monetary policy. Investors now look to upcoming earnings from Alphabet and Amazon to determine whether the technology selloff is justified or has moved too far, too fast.

Technical Outlook (H4)

• Stochastic holding in the mid-range
• Price consolidating below the 20-period EMA
• Directional bias remains uncertain

Key Levels

• Resistance: 6947.90; 7002.50
• Support: 6847.68; 6793.72

Fremora Takeaway

The S&P 500 is no longer trending—it is rotating. As long as price remains below 7,000, upside momentum is limited, with sector leadership shifting away from technology toward value and defensives. Earnings clarity is now the key catalyst.

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WTI Crude Oil — Geopolitical Premium Returns

Key Highlights

• Oil consolidates after sharp volatility
• US–Iran talks cancellation revives risk premium
• Market reprices de-escalation assumptions
• Supply fundamentals remain unsupportive

Market Overview

WTI crude oil is consolidating around the $63.65 level following a rapid reintroduction of geopolitical risk premiums. The move comes after the cancellation of US–Iran talks scheduled for Friday, reversing part of the aggressive de-risking that occurred earlier in the week when diplomatic progress appeared likely.

Oil prices had plunged sharply after initial announcements of renewed negotiations, as markets stripped out escalation risk tied to Middle East supply disruption. The sudden breakdown in talks has forced a partial reassessment, with prices rebounding as traders acknowledge that diplomatic resolution remains far from assured.

Despite renewed geopolitical support, broader fundamentals remain challenging. OPEC+ has opted to maintain current production levels, while analysts continue to note that global supply growth is outpacing demand expansion. Additionally, shifting trade flows—particularly increased competition among discounted Russian barrels in Asia—are limiting the ability of prices to sustain rallies absent geopolitical escalation.

The market now sits in a compressed risk band, with prices reacting sharply to diplomatic headlines rather than changes in physical supply conditions. Upcoming central bank decisions may influence crude indirectly through currency effects, but geopolitical developments remain the dominant driver.

Technical Outlook (H4)

• Stochastic consolidating near overbought
• Price holding above the 20-period EMA
• Momentum strong but extended

Key Levels

• Resistance: 64.77; 66.24
• Support: 62.66; 61.21

Fremora Takeaway

Oil is trading the narrative, not the barrel. As long as diplomacy remains fragile, geopolitical premiums will stay embedded. However, without supply-side confirmation, rallies face structural resistance near the upper end of the current range.